Why Richard Cordray is still on the job at the CFPB

In an era of Republican dominance, the future of the Consumer Financial Protection Bureau is very much in doubt. Ask congressional Republicans which federal offices they’d most like to eliminate, and it’s a safe bet the CFPB would be the first agency most of them mention.

But at least for now, the CFPB still exists, and its director, Richard Cordray, is still on the job – a dynamic a Wall Street Journalpiece recently described as “the greatest mystery in Washington.”

Why hasn’t Donald Trump kicked him to the curb? Let’s unwrap this mystery.

The way the CFPB is structured, its director is not just another member of an administration. Instead, when President Obama chose Cordray for the post in 2013, it was for a five-year appointment, which doesn’t end until 2018.

Trump, of course, would love to replace Cordray with someone who’d be far friendlier with the financial industry and less aggressive on protecting consumers, but as USA Today recently reported, “the law says the director may be removed by the president only for ‘inefficiency, neglect of duty, or malfeasance in office.’”

The estimable David Dayen explained the White House’s dilemma this week.

[I]f Trump did try to fire Cordray, the director could sue for wrongful termination, arguing that Trump was pursuing a policy goal instead of following the for-cause language in the statute. As Georgetown law professor Adam Levitin explains, that would lead to a public lawsuit in which Cordray could seek, and possibly get, discovery, including a deposition of the president and maybe a peek at his tax returns, to see if Trump was benefiting himself personally by tossing out a consumer watchdog that affects his personal business interests.

Clearly the White House wants to steer clear of anything like that.

Team Trump does, however, have a back-up plan of sorts.It’s no secret that Cordray, the former state treasurer and state attorney general of Ohio, is eyeing the Buckeye State’s 2018 gubernatorial race, in which he’d likely be a strong contender. But to run a statewide campaign, Cordray would have to step down from CFPB, head home, and launch a political operation.

The result is an awkward waiting game. If Trump fires Cordray, that wouldn’t just help further the Democrat’s 2018 ambitions, it’d also open the door to a damaging Cordray lawsuit. If Trump leaves Cordray alone, the CFPB director will keep doing work the White House hates, but he’s also likely to voluntarily step down soon anyway.

For now, Team Trump is holding off, which means Cordray is still working. Whether one side or the other will soon grow impatient is anybody’s guess.